ESG Disclosure and Financial Performance: Evidence from Listed Companies on the Stock Exchange of Thailand
Article Sidebar
Main Article Content
บทคัดย่อ
This research examines the relationship between the ESG disclosure rating and firm performance of the listed companies in the stock exchange of Thailand. The study applied regression analysis using ESG disclosure rating from a sample of 210 listed firms with 420 firm-years data collected during 2023 to 2024. This study adds the use of panel data analysis and we used the Hausman test to choose between the random effect, and the fixed effect. Focusing on studying the relationship with important indicators, including return on total assets (ROA), return on equity (ROE), and Tobin's Q.
As a result, ROA showed that the coefficients for both ESG scores and company size did not differ statistically significantly in both fixed-effect and random-effect analysis. However, we found that the ESG rating coefficients were statistically significant and had a negative correlation with ROE and Tobin's Q in a random effect model. The study results indicate that, at the time of the research, the operating costs of ESG outweighed the benefits, with market participants viewing ESG activities as a cost burden and regulatory compliance issue rather than a long-term value-creating factor, resulting in decreased business valuation. Therefore, companies should integrate their business strategies with ESG to improve efficiency and mitigate short-term impacts on performance.
Article Details
อนุญาตภายใต้เงื่อนไข Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
เอกสารอ้างอิง
Aydoğmuş, M., Gülay, G. and Ergun, K. (2022). Impact of ESG performance on firm value and profitability. Borsa İstanbul Review, 22(2), S119-127.
Azizah, F., Setyahuni, S. W., Yovita, L. and Oktavia, V. (2025). Integration of ESG, profitability, and good corporate governance: Strategy for increasing firm value. Jurnal Ilmu Manajemen dan Ekonomika, 17(2), 113-132.
Brigham, E. F., and Houston, J. F. (2021). Fundamentals of financial management: Concise by Cengage (15th ed.). Boston: Cengage Learning.
Chininga, E., Alhassan, A. L. and Zeka, B. (2024). ESG ratings and corporate financial performance in South Africa. Journal of Accounting
in Emerging Economies, 14(3), 692-713.
Chung, K. H. and Pruitt, S. W. (1994). A simple approximation of Tobin's Q. Financial management, 23(3), 70-74.
Eccles, R. G., Ioannou, I. and Serafeim, G. (2014). The impact of corporate sustainability on organizational processes and performance. Management Science, 60(11), 2835-2857.
Freeman, R. E. (2010). Strategic management: A stakeholder approach. Cambridge: Cambridge University Press.
Friede, G., Busch, T. and Bassen, A. (2015). ESG and financial performance: Aggregated evidence from more than 2000 empirical studies. Journal of sustainable finance & investment, 5(4), 210-233.
Friedman, M. (September 13, 1970). The social responsibility of business is to increase its profits. New York Times Magazine, 122-126.
Gillan, S. L., Koch, A. and Starks, L. T. (2021). Firms and social responsibility: A review of ESG and CSR research in corporate finance. Journal of Corporate Finance, 66, 101889.
Jindaluang, P. (2025). The impact of sustainability disclosure on financial performance: Strategic communication for enhancing transparency in Thai listed companies. Journal of Business, Innovation and Sustainability, 20(2), 96-110.
Jensen, M. C. and Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.
Jiamsagul, S. and Sornbandit, W. (2025). ESG performance and audit fees: A case of SET 100 Thailand. Journal of Business, Innovation and Sustainability, 20(3), 115–131.
Khan, M., Serafeim, G. and Yoon, A. (2016). Corporate sustainability: First evidence on materiality. The accounting review, 91(6), 1697-1724.
Kotsantonis, S., Pinney, C. and Serafeim, G. (2016). ESG integration in investment management: Myths and realities. Journal of Applied Corporate Finance, 28(2), 10-16.
Landi, G. and Sciarelli, M. (2019). Towards a more ethical market: The impact of ESG rating on corporate financial performance. Social responsibility journal, 15(1), 11-27.
Maji, S. G. and Lohia, P. (2024). Unveiling the financial effect of ESG disclosure on financial performance in India: Climate-sensitive corporates’ perspective. International Journal of Ethics and Systems, 41(1), 109-131.
Manapreechadeelert, P., Dampitakse, K. and Ngudgratoke, S. (2024). Impact of Environmental, Social and Governance (ESG) performance on firm performance in Thailand stock exchange: Interaction effect of managerial efficiency. ABAC Journal, 44(4), 483-499.
Nguyen, T. L. A. and La, T. T. T. (2025). ESG and firm value in Vietnam: The moderating role of profitability. International Journal of Analysis and Applications, 23, 234.
Oluwakemi, A. A. and Mishelle, D. (2025). Effect of ESG financial materiality on financial performance of firms: Does ESG transparency matter?. Journal of Risk and Financial Management, 18(6), 315.
Prabawati, P. I. and Rahmawati, I. P. (2022). The effects of Environmental, Social, and Governance (ESG) scores on firm values in ASEAN member countries. Journal Akuntansi Dan Auditing Indonesia, 26(2), 119-129.
Priyanto, P. and Suhandi, N. P. M. (2023). Unraveling the link: Relationship firm value shapes ESG ratings. Journal of Accounting and Business Education, 8(2), 61-71.
Rusmana, R. A. R. and Sembiring, F. M. (2025). The effect of ESG performance on firm value with financial performance as mediation in companies listed on IDX ESG leaders in 2020-2023. Journal Of Management, Accounting, General Finance and International Economic Issues, 4(2), 283–298.
Ross, S. A., Westerfield, R. W. and Jordan. (2013). Fundamentals of corporate finance (10th ed.). McGraw Hill.
Safitri, R. N. and Paramita, V. S. (2025). The influence of Environmental Social Governance (ESG), profitability, and capital structure on firm value in IDX ESG leaders (2020-2023). Sinergi International Journal of Economics, 3(1), 19-36.
Stock Exchange of Thailand. (2025a). SET ESG ratings. Retrieved September 11, 2025, from https://setsustainability.com//libraries/1258/item/set-esg-ratings
Stock Exchange of Thailand. (2025b). Sustainability reporting guide for listed companies. SET sustainability. Retrieved September 11, 2025, from https://setsustainability.com/libraries/1119/item/SD_REPORTING
Sustainability Disclosure and Reporting. (2025). In SET. Retrieved November 1, 2025, from https://setsustainability.com/page/disclosure
Tansuwan, R., Meeampol, S., Laohavichien, T. and Wannarat, S. (2025). The relationship between environmental accounting information disclosure and corporate sustainability in companies listed on the Stock Exchange of Thailand. Journal of Business, Innovation and Sustainability, 20(2), 56–71.
Velte, P. (2017). Does ESG performance have an impact on financial performance? Evidence from Germany. Journal of global responsibility, 8(2), 169-178.
World Bank. (2023). ESG disclosure assessment of Thailand’s listed companies and recommendations for policy development. Retrieved October 8, 2025, from https://documents1.worldbank.org/curated/en/099032624052515227/pdf/P1795971dc582706%2071bd9e1114d45321c25.pdf
Xu, Y., Wang, S., Wang, T., Fan, Q. and Wong, M. C. S. (2025). ESG ratings, agency cost and corporate performance: The case of Chinese firms in 2009-2023. Sustainable Futures, 10(2025), 101148.
